The EU published its proposal for a Digital Market Act in December. Articles 5 and 6 of the draft contain various obligations to be imposed on gatekeepers.
In this table, I take the obligations under Articles 5 and 6 of the draft DMA and:
- I provide a short description of the obligation for context (my own, not taken from the DMA);
- I then classify the obligation in terms of its intended impact: is it focused on promoting competition in the core service, or in protecting competition in related – ancillary – services, or both? For most articles this is relatively clear, but some articles do not fit easily into this distinction (see below).
- I give an indication of who the obligation gives rights to. This is usually business users (as defined in the draft regulation), sometimes end-users, sometimes both, and sometimes third parties (typically businesses who fall outside of the definition of business users);
- finally I give some examples (again on the basis of my own understanding) of products and services that might be regulated. These examples are not meant to be comprehensive, even in relation to the company named. Some of the services named may also not meet the criteria of being a regulated gatekeeper – for example by not meeting the turnover, capitalization or other requirements.
On the distinction between whether the obligation promotes core competition or ancillary competition, there is inevitably a grey area caused by the fundamental interconnectedness of things.
- Article 5(f) prohibits the tying of a core platform service with any other core platform service. An antitrust tying analysis would typically consider a (dominant) tying product and a tied product, with the tie being a form of leveraging the dominance into related markets. But 5(f) covers the tying of two core platform services – so we are probably more considering a situation of mutual reinforcement on the core platform services. I’ve therefore categorised this as “both”;
- Articles 6(1)(b) and (c) (uninstallation and installation of apps – some of which may also be core platform services – imagine a Google Search app installed on an Android phone). Here, the obligations may promote competition in Google Search, but there is no direct effect on the OS core platform services market. I’ve therefore categorised this type of obligation as “ancillary”;
- where I refer to the obligation as having a “possibly indirectly core” effect in this table I envisage a scenario like that of the Microsoft Browser case: by tying its own browser to the operating system, Microsoft was (a) leveraging its operating system market power into related markets and (b) protecting its operating system market power from “middleware” that would be OS agnostic and therefore risked undermining its market power in the longer term. It is this second limb that might have an indirectly core effect.
Some clarifications on the services listed:
- It’s important to remember that the DMA is primarily drafted in terms of services, not of undertakings. Whenever we consider what is being regulated we should always think about the particular service, and not the undertaking. (The market capitalisation of the undertaking is relevant, but only as a threshold criterion for a service to be regulated.)
- “Facebook Blue” is apparently the name used internally for the core Facebook social networking service; I use it here to distinguish the service from the company.
- I refer to the Amazon e-commerce website as “Amazon Retail” to distinguish that service from the company and other Amazon products.
And a disclaimer:
I am not expressing a view here as to whether any of the services mentioned below should be regulated – either at all, or in the manner indicated in the draft.
|Draft DMA Art.||Short description||Core, ancillary or both||Right for whom (business users, end-users, both, other)||Examples of “core platform services” possibly affected|
|Art. 5||Obligations for gatekeepers|
|Art. 5(a)||Combining Data||Both||End-users||Facebook Blue; Google Search; Amazon Retail|
|Art. 5(b)||“Most Favoured Nation” (requiring business users to offer their most favourable terms)||Core||Business users||Hotel booking platforms; Amazon Retail; AirBnB. Financial services?|
|Art. 5(c)||Off-platform promotion and contracting||Ancillary||Both||Apple App Store rules for third party apps; Google Android|
|Art. 5(d)||Contacting Authorities||Other||Business users||General|
|Art. 5(e)||Tying of ID services||Ancillary (ID services)||Business users||Facebook Blue; Google Search; Apple OSs; Google Android.|
|Art. 5(f)||Tying of other core platform services||Both||Both||General.|
|Art. 5(g)||Pricing information for advertisers and publishers||Ancillary||Advertisers and publishers||Facebook ads; Google ads|
|Art. 6||Obligations for gatekeepers susceptible of being further specified|
|Art. 6(1)(a)||Self-preferencing / data||Ancillary; possibly also indirectly core||Business users||Amazon Retail; AWS, Microsoft Azure, Google Cloud|
|Art. 6(1)(b)||Uninstallation||Ancillary; possibly also indirectly core||End-users||Apple OSs; Google Android; Microsoft Windows|
|Art. 6(1)(c)||Installation of apps / stores||Ancillary; possibly also indirectly core||End-users||Apple OSs; Google Android; Microsoft Windows|
|Art. 6(1)(d)||Self-preferencing / ranking||Both||Third parties||Google Search; Amazon Retail; App stores|
|Art. 6(1)(e)||Technical restrictions on switching||Ancillary||End-users||Apple OSs; Google Android; Microsoft Windows.|
|Art. 6(1)(f)||Interoperability of ancillary service||Ancillary||Business users||Apple OSs; Google Android; Microsoft Windows.|
|Art. 6(1)(g)||Measuring and verification tools for advertisers and publishers||Ancillary||Advertisers and publishers||Facebook ads; Google ads|
|Art. 6(1)(h)||Real time and continuous data portability||Both||Both||?|
|Art. 6(1)(i)||Customer generated data||Ancillary||Business users (or their authorized third parties)||Amazon Retail|
|Art. 6(1)(j)||FRAND access to ranking, click and view data for search||Core||Third party providers of online search engines||Google Search; Microsoft Bing|
|Art. 6(1)(k)||FRAND access for business users to App Store||Both||Business users||Apple OS; Google Android|
Some thoughts on the above:
First, on the relationship between competition on the market for core platform services and competition in relation to other, related, services, relatively limited attention is given to obligations that would promote competition in the core service (seven, plus two that I have listed as “possibly indirectly core’), compared to the relatively large amount of attention given to promoting competition in related / ancillary services (fifteen). The obligations that could affect core competition vary significantly in their potential impact. Although there is one provision that has a very clear objective of promoting core platform competition – the obligation in Article 6(1)(j) to provide FRAND access to search engine clickstream data – the obligations on other core platform services seem less far-reaching.
The no-tying obligation in Article 5(f) is limited to preventing the tying of core platform services with other core platform services. If the relevant gatekeeper as defined in the regulation also would be dominant in relation to the tying core platform service for the purposes of Article 102, then Article 5(f) goes less far than the competition rules, as the latter would prohibit the tying of other services whether or not they were “core platform services” for the purposes of this regulation. Though the various provisions in Article 6 on app installation / uninstallation and other non-discrimination type provisions would go a long way to covering this gap.
Second, on who is given rights under the regulation, most of the provisions provide rights to business users (ten, plus an additional five for businesses such as “advertisers and publishers” or app developers) and not end-users (seven obligations). It is not obvious from the face of the text why some of the provisions are restricted to business users only: the clearest example is Article 5(d) which provides that gatekeepers must “refrain from preventing or restricting business users from raising issues with any relevant public authority relating to any practice of gatekeepers” but does not prohibit similar restrictions being placed on end-users.
Only one provision – Article 6(1)(i) – provides rights to business users “or their authorized third parties”. It is not obvious why any rights granted to anyone under this regulation should not be exercisable by authorized third parties if the beneficiary of the right so wishes.
OEMs are not explicitly mentioned, which is a little odd given the installation / uninstallation obligations for apps and app stores. They will probably fall under the definition of “business users” as they would be “acting in a commercial … capacity using [the “operating system” core platform service] … for the purpose of …providing goods or services to end users.” The phrasing of “using” an operating system for the purpose of providing goods or services to end-users is a slightly odd way to describe the role of an OEM, and this could perhaps usefully be clarified in a recital.
Finally, on the type of conduct that is prohibited / required, the obligations tend to be couched in technical terms, rather than behavioural ones – there cannot be technical restrictions on switching, for example. But there is no mention of how gatekeepers might use nudge techniques or dark patterns to push end-users into particular choices. It is possible that this might be covered in practice by the broadly drafted anti-circumvention provision in Article 11 which provides that the implementation of the obligations, “shall not be undermined by any behaviour of the undertaking to which the gatekeeper belongs, regardless of whether this behaviour is of a contractual, commercial, technical or any other nature.” That said, given the attention that has been given to dark patterns manipulating consumer behaviour, it seems odd not to mention this explicitly.
Recategorising Article 5(c) as applying to both business users and end-users, as clarified in Recital 38.
Recategorising Article 6(c) as applying to end-users rather than app and app store developers. Though this provision will benefits app store developers, the right vests in the end-users.
As a consequence recalculated obligations as providing 15 rights for business (and similar) users, seven for end-users.]